makr Posted February 25, 2015 Posted February 25, 2015 Just a recent thought: VIP points save 100%-100%/1.05 = 4.76%, not 5%. Not that it matters much, but might be interesting for those of you who (like me) factor in VIP points in purchasing prices. Other factors that I don't consider: no interest rate on points (loss will be lower the earlier the points are being used) chance for overhanging points end up never being used (increased revenue decreases percentual loss) making less lucrative purchasing decissions because of points etc. 1 Quote
KShine Posted February 25, 2015 Posted February 25, 2015 Just a recent thought: VIP points save 100%-100%/1.05 = 4.76%, not 5%. Not that it matters much, but might be interesting for those of you who (like me) factor in VIP points in purchasing prices. Other factors that I don't consider: no interest rate on points (loss will be lower the earlier the points are being used) chance for overhanging points end up never being used (increased revenue decreases percentual loss) making less lucrative purchasing decissions because of points etc. And with this I must wonder - Has Lego Investing analysis just jumped the sharks? Quote
Frank Brickowski Posted February 25, 2015 Posted February 25, 2015 (edited) Just a recent thought: VIP points save 100%-100%/1.05 = 4.76%, not 5%. Not that it matters much, but might be interesting for those of you who (like me) factor in VIP points in purchasing prices. Other factors that I don't consider: no interest rate on points (loss will be lower the earlier the points are being used) chance for overhanging points end up never being used (increased revenue decreases percentual loss) making less lucrative purchasing decissions because of points etc. It saves 5% of your FIRST purchase on the NEXT purchase. Just don't factor in any saving for the first purchase, then every next savin is in fact 5%. Edited February 25, 2015 by rfish Quote
makr Posted February 25, 2015 Author Posted February 25, 2015 It saves 5% of your FIRST purchase on the NEXT purchase. Just don't factor in any saving for the first purchase, then every next savin is in fact 5%. No it's not, you won't have enough points to get a 5% discount on your 3rd purchase. The factor you are refering to is what I meant by overhanging points not being used. Quote
makr Posted February 25, 2015 Author Posted February 25, 2015 And with this I must wonder - Has Lego Investing analysis just jumped the sharks? As I said, "Not that it matters much, ..." Even if you would spend $100,000, it's a ~$240 difference. Quote
minicoopers11 Posted February 25, 2015 Posted February 25, 2015 I factor VIP points into my purchase prices only when I use them. Leads to some wildly low prices at times, but easier for me to keep track of. Same thing with TRU rewards (lol, good luck tracking that). 3 Quote
gregpj Posted February 25, 2015 Posted February 25, 2015 VIP points are NOT a discount. They are "virtual cash back" when you spend real cash. You have to think about them differently than a 5% discount. 1 Quote
mscheaf Posted February 25, 2015 Posted February 25, 2015 Exactly. I don't consider the discount when I buy a set. I log what I paid. When I use the points I log the discount on the set I bought the points with. Simple Quote
lego rules Posted February 25, 2015 Posted February 25, 2015 As already stated the VIP points get you 5% of the present value spent in virtual money. You spend $100 gets you 5% or $5 in virtual money of that purchase valued set. There are taxes to take into account as well. When you make your first purchase, full tax is paid. When you use your VIP points, the cost is lowered and no tax is paid on the VIP points used. Quote
Yinchuan Posted February 25, 2015 Posted February 25, 2015 Exactly. I don't consider the discount when I buy a set. I log what I paid. When I use the points I log the discount on the set I bought the points with. Simple I had this thought the other day... So if I buy set A, B, and C and cash in 40'bucks in credit. Which set to I apply the discount to in my log? Quote
justapilgrim Posted February 25, 2015 Posted February 25, 2015 Are you factoring in demolition drillers for $7 and winter elf scene 1/2 for $20+? You are over thinking Sent from my SAMSUNG-SM-N910A using Brickpicker mobile app 1 Quote
Flemdog33 Posted February 25, 2015 Posted February 25, 2015 Are people really analyzing the difference between 5 percent and 4.76 percent back? If I have to dig that deep I might as well just get out of Lego. 1 Quote
gregpj Posted February 25, 2015 Posted February 25, 2015 I had this thought the other day... So if I buy set A, B, and C and cash in 40'bucks in credit. Which set to I apply the discount to in my log? Why does it matter? Spread it out evenly or apply all to one set. In the end it all adds up. Do what makes sense to you. 2 Quote
makr Posted February 25, 2015 Author Posted February 25, 2015 VIP points are NOT a discount. They are "virtual cash back" when you spend real cash. You have to think about them differently than a 5% discount. You never get cash back but Lego back instead. While not being a discount per se, the effect converges towards a discound with increasing revenue. Exactly. I don't consider the discount when I buy a set. I log what I paid. When I use the points I log the discount on the set I bought the points with. Simple That's a more honest approach, but has the disadvantage that you can't really tell whether you made a good deal after selling. As already stated the VIP points get you 5% of the present value spent in virtual money. You spend $100 gets you 5% or $5 in virtual money of that purchase valued set. There are taxes to take into account as well. When you make your first purchase, full tax is paid. When you use your VIP points, the cost is lowered and no tax is paid on the VIP points used. Taxes can be disregarded, you don't get points for taxes you paid and you don't pay taxes for your savings through points. I had this thought the other day... So if I buy set A, B, and C and cash in 40'bucks in credit. Which set to I apply the discount to in my log? I give 4.76% to all sets or 9.52% for those bought with double points. This is equivalent to distributing the savings proportionally. Are you factoring in demolition drillers for $7 and winter elf scene 1/2 for $20+? You are over thinking I don't consider polies to be directly related to VIP points. But I agree that this is more talking than it's worth. Didn't intend to tell anyone that they couldn't consider points to be worth 5%, just pointed out that it's (slightly) wrong. Obviously everyone is free to calculate however they want. Just a simple example of what I meant: Buying $10500 sticker price costs $10000 (=4.76% discount; savings; whatever) Buying $10000 sticker price costs $9525 and you'll walk out with 25 points. It will cost more than $9500 (=5% discount) Quote
redeemed763 Posted February 25, 2015 Posted February 25, 2015 I kinda figured this was a "duh!" all along but apparently some don't get it, we understand that points still accrue until you get to the next 100 point mark where they can be redeemed for $5, we are referring what happens to all those .99 cents that lego ends each price tag in, resulting in one lost point per purchase (you have spend 99 cents of the dollar, its dumb that you can't be rewarded for the dollar). The loss of these points is really a problem for lots of small purchases but it really mitigates as you make larger purchases. Unfortunately, Lego always does those stupid 99.99 price games which not only makes the sets seem cheaper than the are but forces you to tack on extra purchases to get to different price thresholds for promotions and VIP points. The other thing is that you don't earn VIP points on tax spent (not that you should) this just doesn't enter many people's minds. In my area, the Lego stores have a 9 or 10% sales tax, buying a set for $9.99 costs me $10.99 and I only get 9 VIP points - thus, if I continue this cycle of spending $11 and getting 9 vip points, I would wind up spending $121 and still be one VIP point shy earning my full $5, so we will call this $4.95 in discounts for spending $121. Conversely, if I buy just one $99.99 set, I spend $110.99 and get the same VIP reward of $4.95. One $99.99 purchase yields a 4.45% discount for me after taxes Ten $9.99 purchases yields a 4.01% discount net of taxes. Quote
mscheaf Posted February 25, 2015 Posted February 25, 2015 (edited) I had this thought the other day... So if I buy set A, B, and C and cash in 40'bucks in credit. Which set to I apply the discount to in my log? Whichever one you want to. Whatever makes the most sense. Maybe set A and B were already on sale so apply it to C. Maybe you are worried about set B the most after retirement, so apply it to that one to get a cheaper buy in. If all things are equal I just spread it out. Edited February 25, 2015 by mscheaf Quote
lego rules Posted February 25, 2015 Posted February 25, 2015 Just a recent thought: VIP points save 100%-100%/1.05 = 4.76%, not 5%. Not that it matters much, but might be interesting for those of you who (like me) factor in VIP points in purchasing prices. Other factors that I don't consider: no interest rate on points (loss will be lower the earlier the points are being used) chance for overhanging points end up never being used (increased revenue decreases percentual loss) making less lucrative purchasing decissions because of points etc. I am quite certain your math is also wrong. You can't use /1.05. That is not a 5% discount. The correct number to divide by is 1.052632 To find the discount of what you are buying it is it's price X *.05 Quote
gregpj Posted February 25, 2015 Posted February 25, 2015 (edited) Discount implies that it went against the current purchase which IMO is wrong. If we forget about the .99 trick (which yes, it can bite you in the butt if you make many teenie purchases) it is CASH BACK FOR FUTURE PURCHASES. (yep, I'm shouting that in my head) Here is a simple example.... I pay 5% taxes on purchases from LEGO Shop at Home. If I spend $100.... $100 * 1.05 = $105 (100 points, $5 back, no cash back on taxes) If I cash those in on my next purchase.... ($100 - $5) * 1.05 = $99.75 ($4.50 back) What? Isn't $5.25 greater than 5%? Not really because if you take the 95% purchase price and apply the $5 back and that i don't pay taxes on that $5, I get... $105 * 0.95 = $99.75 My NET savings on the next purchase was 5% of the original. Obviously the next purchase I will save less $$ but the savings are STILL 5% of the original CASH used. You know someone much smarter than us designed the VIP program (well, maybe, maybe not... I've designed a VIP points program for a previous job but I probably shouldn't have hahaha). In the end, you save UP TO 5% on future purchases with the VIP points. PS The tax rate doesn't matter... if it was 13% this still adds to the same. $100 * 1.13 = $113 ($5 back, no cash back on taxes) ($100 - $5) * 1.13 = $107.35 ($4.50 back) $113 * 0.95 = $107.35 Net savings on subsequent purchase: 5% Edited February 25, 2015 by gregpj Quote
makr Posted February 25, 2015 Author Posted February 25, 2015 I am quite certain your math is also wrong. You can't use /1.05. That is not a 5% discount. The correct number to divide by is 1.052632 To find the discount of what you are buying it is it's price X *.05 This is exactly what I contested in my first post from which I concluded that it doesn't result in a long term 5% cost reduction. It isn't price 0.05 since you only get points, not cash. Points are worth less than cash since you can't use them to "buy" anything and get points for it. Just as in the above example: Someone having 0 points buys a set for $50 each month. After 20 months, he has enough points to get one set for free and will end up with 0 points. He has spent a total of $1000 and got goods for which he would have paid $1050 without points, which is exactly the ratio I divided it by. Quote
mscheaf Posted February 25, 2015 Posted February 25, 2015 (edited) Discount implies that it went against the current purchase which IMO is wrong. If we forget about the .99 trick (which yes, it can bite you in the butt if you make many teenie purchases) it is CASH BACK FOR FUTURE PURCHASES. (yep, I'm shouting that in my head) Here is a simple example.... I pay 5% taxes on purchases from LEGO Shop at Home. If I spend $100.... $100 * 1.05 = $105 (100 points, $5 back, no cash back on taxes) If I cash those in on my next purchase.... ($100 - $5) * 1.05 = $99.75 ($4.50 back) What? Isn't $5.25 greater than 5%? Not really because if you take the 95% purchase price and apply the $5 back and that i don't pay taxes on that $5, I get... $105 * 0.95 = $99.75 My NET savings on the next purchase was 5% of the original. Obviously the next purchase I will save less $$ but the savings are STILL 5% of the original CASH used. You know someone much smarter than us designed the VIP program (well, maybe, maybe not... I've designed a VIP points program for a previous job but I probably shouldn't have hahaha). In the end, you save UP TO 5% on future purchases with the VIP points. PS The tax rate doesn't matter... if it was 13% this still adds to the same. $100 * 1.13 = $113 ($5 back, no cash back on taxes) ($100 - $5) * 1.13 = $107.35 ($4.50 back) $113 * 0.95 = $107.35 Net savings on subsequent purchase: 5% This is way to complicated for me. I just log what I pay at the time for a set. I see no reason to go through all that when it all comes out even in the end anyway. Edited February 25, 2015 by mscheaf 2 Quote
lego rules Posted February 25, 2015 Posted February 25, 2015 This is exactly what I contested in my first post from which I concluded that it doesn't result in a long term 5% cost reduction. It isn't price 0.05 since you only get points, not cash. Points are worth less than cash since you can't use them to "buy" anything and get points for it. Just as in the above example: Someone having 0 points buys a set for $50 each month. After 20 months, he has enough points to get one set for free and will end up with 0 points. He has spent a total of $1000 and got goods for which he would have paid $1050 without points, which is exactly the ratio I divided it by. So what am I missing?? $50 saving divided by $1000 cost is 5% Quote
justafrog Posted February 25, 2015 Posted February 25, 2015 I'm a simple frog. 1. I sees the LEGO. 2. I buys the LEGO. 3. I takes the LEGO home. The only things I buy from TLG are exclusives I can't get on discount anywhere else anyway, and occasional clearance. Taxes I pay are refunded to me when I file my state sales tax returns. Whether I'm getting a 4.8888877329238938024839043% discount or 5% doesn't matter. In 20 days, whether I'm getting a 9.99023493890243241% discount or 10% won't matter, either. 7 Quote
spener90 Posted February 25, 2015 Posted February 25, 2015 I'm sure I'm not alone in this, but I don't make my decision on whether to purchase an item based on VIP points. Also, the items I spend my VIP points on are for personal builds. Quote
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